Plenty of charts in the link. http://www.zerohedge.com/news/era-independent-central-banks-over Central economic planning will continue to make sure that interest rates will not reflect the reality of supply and demand. Are we doomed to endless credit bubbles caused by price fixing from the Fed? Or will the US Treasury bubble just pop, regardless of what the Fed does? I say the Treasury bubble will pop, and price discovery will finally take place in the fixed income market whether central planners like it or not. The sovereign debt bubble is bigger than any other bubble before it. If you want to look at another Keynesian failure that is in this same situation, look at Japan. If rates go up to 2% there, annual debt service expense surpasses annual tax revenue. When you need to borrow to pay interest, that's the ballgame. Rates can go up on their own. Europe is proving that right now as the eye of the hurricane appears to have passed in Italy and Spain. What will the ECB do, print like mad again with gas prices already through the roof? Watch closely, that is coming to the US and Japan. Another important factor that this article did not touch on was the garbage assets that the Fed and the ECB are holding. If they raise interest rates they will just nuke their own balance sheets.
